The following information on maintenance and repair costs and revenues for the last two years is available

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The following information on maintenance and repair costs and revenues for the last two years is available from the accounting records at Arnie€™s Arcade & Video Palace. Arnie has asked you to help him understand the relation between business volume and maintenance and repair cost.

The following information on maintenance and repair costs and re

Required
a. Ignoring the data, would you predict that, in general, there is a positive relation between revenues and maintenance and repair costs? Why?
b. Estimate a linear regression with maintenance and repair cost as the dependent variable and revenue as the independent variable. Does the result support your prediction in part (a)? What are some factors that may explain theresult?

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Related Book For  answer-question

Fundamentals of Cost Accounting

ISBN: 978-0077398194

3rd Edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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